Andhra's SMEs Facing Crisis

Faced with a 12-day power holiday in a month, small scale industries in Andhra Pradesh threatened to shut down production.

The Federation of Andhra Pradesh Small Industries Associations (FAPSIA) sought permission from the labour commissioner to shut down units. The federation members served lock-out notices to the authorities saying it would no longer be viable to continue production.

Joint labour commissioner Ravibhushan Rao assured the federation that he would bring the issue to the government's notice.

The electricity distribution companies have decided to impose 12-day power holidays on the industrial sector from March 1 in view of the mounting power shortage. The authorities said this was inevitable due to the increasing demand from the domestic sector in view of the onset of summer and to maintain daily seven-hour supply to agriculture.

The lock-out notice may trigger a row between the industrial units and the employees. Some managements have already hinted at a 50 per cent cut in the salaries of the employees.

The FAPSIA, an apex body of small scale industry associations in the state, had on Sunday given a call for a 15-day shutdown of the industrial units to protest the power cuts.

FAPSIA leaders said the latest move would deal a big blow to industrial production in the state as the small scale sector was already facing various problems. It was only two months ago that the state had lifted eight-day power holidays for the industrial sector.

The state has about 161,000 small scale units, providing livelihood to 3.7 million families. The FAPSIA said if the production days in a month are cut down to 18, it would have serious consequences for the units.

The Andhra Pradesh Transmission Corporation (AP Transco) had already declared that there would be a 40 per cent power cut for industries in March and April.

With the power demand crossing 12,000 MW per day, the state is facing a shortfall of about 2,000 MW. The demand-supply gap is likely to further widen in the coming weeks.